Banking boss bags 55% pay hike

Thursday 28 March 2002 00:00 BST

BANKING chief James Crosby has bagged a 55% pay hike for presiding over the creation of HBOS, taking his salary to more than a £1m. The bank's annual report, released late on Thursday, shows deputy chairman Peter Burt landed a 46% increase, swelling his pay packet to £994,000.

The salary increases are the latest in a series of high-profile wage rises for leading executives and are likely to fuel the row over fat cat salaries.

But the bank pointed to its stock market performance over the past year. 'It was an exceptional performance, hence the bonuses,' a spokesman said. The group added, however, that it had underperformed rival banks.

Halifax merged with Bank of Scotland last September to create HBOS, the country's fifth largest bank. Heavy cost-cutting enabled the directors to meet performance targets, HBOS said. It plans to cut 2,000 jobs over the next three years from its 62,000-strong workforce.

HBOS said last month the merger was proceeding well, with annual cost and revenue benefits put at £690m. Also in the past year, Halifax strengthened its position as Britain's largest mortgage provider by winning customers through cheaper mortgages.

Crosby, formerly head of Halifax, received a total salary of £1.1m after an annual cash bonus of £495,000. Alongside the hike for Burt, former head of Bank of Scotland, HBOS chairman Lord Stevenson's salary rose 37% to £363,000. But the spokesman said the directors would not receive a longer-term bonus, as its two main divisions had underperformed its peers over the past three years.

Rothschild Asset Management fund manager Charles Deptford said he believed HBOS executives were entitled to their pay rise as they had performed well over the last year. 'I think they did a decent job in terms of getting the merger through,' he added. 'The share price has gone up a lot from where it was a year ago.'